A major indicator in the cryptocurrency world which is the stable coin supply ratio oscillator has recently shown that capital is beginning to flow into Bitcoin back after a period of a setback in the past.
This major indicator is very key and important because, in the past, it has been pointing to major price bottom in the Bitcoin price history. So, this indicator has now shown that there is a renewed cash flow of capital back inside Bitcoin.
This oscillator software was created by Willy Woo who is a crypto analyst. The oscillator has been used by many including Glass node which is a blockchain analytics company to track cryptocurrency prices.
The oscillator has revealed that Bitcoin has moved up from a shocking low of -2.6 to -1.9 in the recent month. This record low for Bitcoin lasted over 12 months.
This new recovery by Bitcoin shows that cash has been flowing into Bitcoin from stable coins; this is according to a tweet from Glass node on Thursday.
It is, therefore, safe to conclude that bargain hunters have bought the dip in BTC by employing stable coins.
Stable coins are just crypto currencies that have external influence or reference like the US dollars. These external references are what state the value of stable coins at a particular period.
Stable coins have an advantage over other digital currencies in that they are very stable in price. Stable coins are also used in the area of purchasing crypto currencies.
According to a report by Messari, the market capitalization of Bitcoin has surged year after year over 10 years to up to $100 billion. The variable that this oscillator software calculates is the SSR which means the Stable coin Supply Ratio.
This variable is the result of the ratio of the Bitcoin supply to the stable coin supply with the unit being BTC. When the stable coin supply ratio is low, then the purchasing power for Bitcoin goes up. But when the stable coin supply ratio is high, the buying power of Bitcoin goes down.
The main function of the stable coin supply ratio oscillator is to monitor the SSR for sudden drops or rises, for extreme figures, and any sudden change in the trend of values.
Critics have said that this oscillator is however not a perfect indicator as it does not take into consideration other Bitcoin derivatives. Looking past that setback, the oscillator software has proved to be very reliable and efficient as an indicator in the past.
Bitcoin which is still the leading cryptocurrency globally is currently trading at almost $34,500.